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  • 10 Reasons Barry Ritholtz Is Wrong About Gold [View article]
    I particularly like the last paragraph; good lunch, Felix?

    Joking aside, a "correct" dissection of a bad article, thanks.
    Jan 12 08:32 AM | 6 Likes Like |Link to Comment
  • Moving The Goal Posts [View article]
    Here in the UK the BBC has a calculator on its website that allows you to judge your own personal inflation rate; obviously I don't know the calculations taking place behind the scenes, but my own rate is over 4%, according to the site. Clearly, one-size CPI does not fit all, so while this is a useful analysis, it rather misses the point, which is that some (most?) feel or see more inflation than the figures suggest. Also, when rates move (as they must) CPI will not incorporate increased mortgage costs - how will that "feel" then? Finally, is it just possible that it is not actually inflation that is the problem, it is the lack of real wage growth AND the rising stealth taxes which people mistake for inflation - after all, does it really matter if you can afford less because prices are higher, or because your disposable income is lower?
    Jan 1 09:31 AM | 3 Likes Like |Link to Comment
  • Bad Bank Of The Day, RBS Edition [View article]
    Reckon anyone senior will leave as a result? The people at the top don't even know what is going on lower down, and that is a key problem with these huge institutions. It goes back to Barings and Nick Leeson, John Gutfreund & Salomons (he said to Michael Lewis he had no idea what his traders were up to) and any number of other big banks. Schroders pulled back from building a trading division in the Big Bang days because senior management realised they would have no clue what risks the traders were taking on (still got stitched by an FRA trader though). If the CEO and Chairman were forced to leave WITHOUT compensation running into the millions, perhaps there would be more control and oversight. Is that a pig I see in the air above my house?
    Dec 1 06:37 AM | Likes Like |Link to Comment
  • Martin Armstrong: Expect Cashless Society, Not Hyperinflation [View article]
    Best keep an eye on how much the Chinese switch into short-dated US debt - and if they then quietly retire that from $-debt rather than roll it.
    Dec 1 05:58 AM | Likes Like |Link to Comment
  • The Fed Creates A New Germany Out Of Thin Air [View article]
    Quote Keynes at you to offer a vision of how it plays out: Inflation is the means whereby governments can steal, almost unnoticed, peoples wealth and assets.

    Or you could go for: There is no surer way to destroy an economy than to bebase [debauch] its currency. (Sorry, not time to look up proper quotes).

    Either way I am intrigued as to what happens next - it does feel like driving a car - albeit carefully - on a very icy road, and discovering you are not the driver, you too are merely a passenger as events unfold. Great post, btw.
    Nov 30 10:35 AM | 1 Like Like |Link to Comment
  • Gold/GWP: Why Gold May Still Have Further To Fall [View article]
    On this aspect of the gold story, yes; if you choose to read Eric Parnell's last piece on gold, where he looks at the macro perspective, and views gold as just another traded commodity (after all, wheat may be used as a foodstuff, but how many trading the futures are actually millers?) you will see an excellent example of worthwhile commentary on gold price movements. I agree, a lot of the chatter is overdone, but one doesn't imagine the car with the biggest engine wins the race, there are many more factors to it than that.
    Jul 14 10:07 AM | 2 Likes Like |Link to Comment
  • Gold Likely Entering A Deflationary Spiral [View article]
    Not many years ago we watched gold slump, simply because it was the most liquid holding in portfolios getting hammered and being margin-called. Admittedly this feels/smells different, but as the poster says, we may be entering deflationary times (as per Japan), at which point, what do we think the authorities will do? Right or wrong, the orthodoxy is that a little inflation is good, and deflation is very, very bad (doesn't really help the consumer-led growth machine), so I expect the printing presses will begin to whirr once again. Gold is insurance for the likes of us, and as John Mauldin says, do we stop paying our premiums because our house did not burn down this year?
    Jul 2 01:04 PM | Likes Like |Link to Comment
  • Doomed Europe [View article]
    Last I heard on Portugal they were about to ask for more money - but until that is denied we won't have it confirmed eh?

    If the economy can't get moving again - and it hard to see how it can - the level of joblessness will bring increasing unrest, which is what the politicians hoped to avoid with the Union in the first place. So tell me, is it the politicians who have failed to construct a workable Union, or is the whole concept of a united Europe unachievable?

    I think Felix is right, but what does the endgame hold? This is not one country, where (eventually) if one part starts to improve, some benefits will accrue via transfers or government spending to other regions; it is a whole group of countries which seem to be in quiet competition with each other, while pretending to be united with one goal.
    May 13 03:05 PM | 2 Likes Like |Link to Comment
  • The Good News, The Bad News And What's Very Ugly [View article]
    if you want some easy research on the real impact of inflation, try Dr Tim Morgan at Tullett Prebon. And if you like his stuff, you could read his bigger piece on where we are headed - an easy read, but not easy reading, if you get my drift.
    May 11 12:21 PM | 1 Like Like |Link to Comment
  • Gold: The Fear Bubble Bursts [View article]
    People don't buy gold as an investment; you might buy a miner as an investment, but you buy gold as protection or for a specific use (e.g. jewellery). Any other way of looking at gold is plain wrong, and what we are seeing is a shake-out of traders, not investors, and (as long as they are not trading my money) I couldn't give a monkeys if traders are getting creamed in the gold market. When it comes to gold as insurance, I look at the ultimate guarantors of our way of life - the central banks, and the only ones I see selling are those being forced to; all the rest (well, some of the rest) are buying - and the dip to $1340 proved to be a buying opportunity.
    Apr 18 09:46 AM | 2 Likes Like |Link to Comment
  • Is Gold Foreshadowing A Stock Market Implosion? [View article]
    take a look at my post a few minutes ago; this really smacks of the derivatives tail wagging the physical dog.
    Apr 15 01:31 PM | 2 Likes Like |Link to Comment
  • Is Gold Foreshadowing A Stock Market Implosion? [View article]
    I read that the big sell order was in the paper market, not physical gold; having worked in derivatives for many years, we often watched as a per transaction drove prices in the underlying, as the futures (let alone options) markets dwarfed the underlying. However, once the paper transaction was complete, the underlying returned to a fundamental stance. I had clients who closed ETF positions in gold because they ceased to trust the notes (Den Danske anyone?), so maybe this is far simpler than everyone makes out? Get out of paper contracts that say you are holding gold, when in fact all they are is banknotes by another name; put the cash thus gained into something tangible - like physical gold maybe?
    Apr 15 01:27 PM | 2 Likes Like |Link to Comment
  • Gold Surges To 33-Year High In Yen - Does It Mean Anything? [View article]
    "But is the performance of gold denominated in yen even meaningful in terms of the outlook for the yellow metal?"

    Of course it is! This is all part of the move by "developed world" central banks to try and avoid admitting the truth - if you are so deep in debt it is hard to borrow money, you just have to cut spending. The CBs say "oh no you don't, we can just print it!" But money is about trust, and if I don't trust the bloke with the keys to the printing press, who/what can I trust? Mr Krugerrand/Gold Eagle/Maple Leaf et al.
    Apr 9 10:41 AM | 1 Like Like |Link to Comment
  • Money And Asset Prices (The Liquidity Effect As Epiphenomenon) [View article]
    "Monetary stimulus will raise the price of foreign exchange for two reasons. One is obvious; money is neutral in the long run and hence any increase in M shows up as higher prices in the long run, and this includes the price of foreign exchange."

    Isn't it basic economics to differentiate between long term and short term? Even if we allow that time lags are almost indefinable, is it not true that the main monetary policy being pursued in the West (and now Japan) is tilted very much to the short term? In the short term, any expansion of the money supply will "create" more supply of money, which will make that money worth less, both as expressed by interest rates and as expressed by currency pairs; do you mean by saying, Scott, the "price of foreign exchange rises" that the country doing the monetary expansion is going to force its currency down? If you are, then that is pretty much a given; if you aren't, I'd really like some clarification, as I don't think I really get it.
    Apr 9 08:40 AM | Likes Like |Link to Comment
  • "I call this Cyprus leaving the euro but keeping the word 'euro' to save face," writes Tyler Cowen. "What will the price of a Cypriot euro be, relative to the German euro? 50%?" Next up may be Slovenia, he concludes. [View news story]
    An interesting piece of gamesmanship, from Germany in particular. I cannot work out what they think they have achieved? Cyprus is now dead in the water, the euro is no better off than it was on Friday, and the next shoe to fall is probably lining up. I keep thinking about Juncker saying "we know what we have to do, we just don't know how to be re-elected if we do it". They do not seem to have a plan at all.
    Mar 25 10:37 AM | Likes Like |Link to Comment